GUARANTEE AND COLLATERAL AGREEMENT
GUARANTEE AND COLLATERAL AGREEMENT, dated as of
September 10, 1997, made by each of the signatories hereto
(together with any other entity that may become a party hereto as
provided herein, the "Grantors"), in favor of Fleet Bank, N.A.,
as Administrative Agent (in such capacity, the "Administrative
Agent") for the banks and other financial institutions or
entities (the "Lenders") from time to time parties to the Credit
Agreement, dated as of September 10, 1997 (as amended,
supplemented or otherwise modified from time to time, the "Credit
Agreement"), among PHYSICIAN COMPUTER NETWORK, INC. (the
"Borrower"), the Lenders, XXXXXX COMMERCIAL PAPER INC., as
Arranger and as Syndication Agent and the Administrative Agent.
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders
have severally agreed to make extensions of credit to the
Borrower upon the terms and subject to the conditions set forth
therein;
WHEREAS, the Borrower is a member of an affiliated
group of companies that includes each other Grantor;
WHEREAS, the proceeds of the extensions of credit under
the Credit Agreement will be used in part to enable the Borrower
to make valuable transfers to one or more of the other Grantors
in connection with the operation of their respective businesses;
WHEREAS, the Borrower and the other Grantors are
engaged in related businesses, and each Grantor will derive
substantial direct and indirect benefit from the making of the
extensions of credit under the Credit Agreement; and
WHEREAS, it is a condition precedent to the obligation
of the Lenders to make their respective extensions of credit to
the Borrower under the Credit Agreement that the Grantors shall
have executed and delivered this Agreement to the Administrative
Agent for the ratable benefit of the Lenders;
NOW, THEREFORE, in consideration of the premises and to
induce the Administrative Agent and the Lenders to enter into the
Credit Agreement and to induce the Lenders to make their
respective extensions of credit to the Borrower thereunder, each
Grantor hereby agrees with the Administrative Agent, for the
ratable benefit of the Lenders, as follows:
SECTION 1. DEFINED TERMS
1.1 Definitions. (a) Unless otherwise defined
herein, terms defined in the Credit Agreement and used herein
shall have the meanings given to them in the Credit Agreement,
and the following terms which are defined in the Uniform
Commercial Code in effect in the State of New York on the date
hereof are used herein as so defined: Accounts, Chattel Paper,
Documents, Equipment, Farm Products, Instruments and Inventory.
(b) The following terms shall have the following
meanings:
"Agreement": this Guarantee and Collateral Agreement,
as the same may be amended, supplemented or otherwise
modified from time to time.
"Borrower Obligations": the collective reference to
the unpaid principal of and interest on the Loans and
Reimbursement Obligations and all other obligations and
liabilities of the Borrower (including, without limitation,
interest accruing at the then applicable rate provided in
the Credit Agreement after the maturity of the Loans and
Reimbursement Obligations and interest accruing at the then
applicable rate provided in the Credit Agreement after the
filing of any petition in bankruptcy, or the commencement of
any insolvency, reorganization or like proceeding, relating
to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) to the
Administrative Agent or any Lender (or, in the case of any
Hedge Agreement referred to below, any Affiliate of any
Lender), whether direct or indirect, absolute or contingent,
due or to become due, or now existing or hereafter incurred,
which may arise under, out of, or in connection with, the
Credit Agreement, this Agreement, the other Loan Documents,
any Letter of Credit or any Hedge Agreement entered into by
the Borrower with any Lender (or any Affiliate of any
Lender) or any other document made, delivered or given in
connection therewith, in each case whether on account of
principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including,
without limitation, all fees and disbursements of counsel to
the Administrative Agent or to the Lenders that are required
to be paid by the Borrower pursuant to the terms of any of
the foregoing agreements).
"Collateral": as defined in Section 3.
"Collateral Account": any collateral account
established by the Administrative Agent as provided in
Section 6.1 or 6.4.
"Contracts": the contracts and agreements listed in
Schedule 7 and, to the extent assignment thereof is not
expressly prohibited, all other contracts and agreements to
which any Loan Party is a party or under which any Loan
Party is a beneficiary or has any rights, in each case as
the same may be amended, supplemented or otherwise modified
from time to time, including, without limitation, (i) all
rights of any Grantor to receive moneys due and to become
due to it thereunder or in connection therewith, (ii) all
rights of any Grantor to damages arising thereunder and
(iii) all rights of any Grantor to perform and to exercise
all remedies thereunder.
"Copyrights": (i) all copyrights arising under the
laws of the United States, any other country or any
political subdivision thereof, whether registered or
unregistered and whether published or unpublished
(including, without limitation, those listed in Schedule 6),
all registrations and recordings thereof, and all
applications in connection therewith, including, without
limitation, all registrations, recordings and applications
in the United States Copyright Office, and (ii) the right to
obtain all renewals thereof.
"Copyright Licenses": any written agreement naming any
Grantor as licensor or licensee (including, without
limitation, those listed in Schedule 6), granting any right
under any Copyright, including, without limitation, the
grant of rights to manufacture, distribute, exploit and sell
materials derived from any Copyright.
"General Intangibles": all "general intangibles" as
such term is defined in Section 9-106 of the Uniform
Commercial Code in effect in the State of New York on the
date hereof and, in any event, including, without
limitation, with respect to any Grantor, all contracts,
agreements, instruments and indentures in any form, and
portions thereof, to which such Grantor is a party or under
which such Grantor has any right, title or interest or to
which such Grantor or any property of such Grantor is
subject, as the same may from time to time be amended,
supplemented or otherwise modified, including, without
limitation, (i) all rights of such Grantor to receive moneys
due and to become due to it thereunder or in connection
therewith, (ii) all rights of such Grantor to damages
arising thereunder and (iii) all rights of such Grantor to
perform and to exercise all remedies thereunder, in each
case to the extent the grant by such Grantor of a security
interest pursuant to this Agreement in its right, title and
interest in such contract, agreement, instrument or
indenture is not prohibited by such contract, agreement,
instrument or indenture without the consent of any other
party thereto, would not give any other party to such
contract, agreement, instrument or indenture the right to
terminate its obligations thereunder, or is permitted with
consent if all necessary consents to such grant of a
security interest have been obtained from the other parties
thereto (it being understood that the foregoing shall not be
deemed to obligate such Grantor to obtain such consents);
provided, that the foregoing limitation shall not affect,
limit, restrict or impair the grant by such Grantor of a
security interest pursuant to this Agreement in any
Receivable or any money or other amounts due or to become
due under any such contract, agreement, instrument or
indenture.
"Guarantor Obligations": with respect to any
Guarantor, the collective reference to (i) the Borrower
Obligations and (ii) all obligations and liabilities of such
Guarantor which may arise under or in connection with this
Agreement or any other Loan Document to which such Guarantor
is a party, in each case whether on account of guarantee
obligations, reimbursement obligations, fees, indemnities,
costs, expenses or otherwise (including, without limitation,
all fees and disbursements of counsel to the Administrative
Agent or to the Lenders that are required to be paid by such
Guarantor pursuant to the terms of this Agreement or any
other Loan Document).
"Guarantors": the collective reference to each Grantor
other than the Borrower.
"Hedge Agreements": as to any Person, all interest
rate swaps, caps or collar agreements or similar
arrangements entered into by such Person providing for
protection against fluctuations in interest rates or
currency exchange rates or the exchange of nominal interest
obligations, either generally or under specific
contingencies.
"Intellectual Property": the collective reference to
all rights, priorities and privileges relating to
intellectual property, whether arising under United States,
multinational or foreign laws or otherwise, including,
without limitation, the Copyrights, the Copyright Licenses,
the Patents, the Patent Licenses, the Trademarks and the
Trademark Licenses, and all rights to xxx at law or in
equity for any infringement or other impairment thereof,
including the right to receive all proceeds and damages
therefrom.
"Intercompany Note": any promissory note evidencing
loans made by any Grantor to any of its Subsidiaries.
"Issuers": the collective reference to each issuer of
a Pledged Security.
"New York UCC": the Uniform Commercial Code as from
time to time in effect in the State of New York.
"Obligations": (i) in the case of the Borrower, the
Borrower Obligations, and (ii) in the case of each
Guarantor, its Guarantor Obligations.
"Patents": (i) all letters patent of the United
States, any other country or any political subdivision
thereof, all reissues and extensions thereof and all
goodwill associated therewith, including, without
limitation, any of the foregoing referred to in Schedule 6,
(ii) all applications for letters patent of the United
States or any other country and all divisions, continuations
and continuations-in-part thereof, including, without
limitation, any of the foregoing referred to in Schedule 6,
and (iii) all rights to obtain any reissues or extensions of
the foregoing.
"Patent License": all agreements, whether written or
oral, providing for the grant by or to any Grantor of any
right to manufacture, use or sell any invention covered in
whole or in part by a Patent, including, without limitation,
any of the foregoing referred to in Schedule 6.
"Pledged Notes": all promissory notes listed on
Schedule 2, all Intercompany Notes at any time issued to any
Grantor and all other promissory notes issued to or held by
any Grantor (other than promissory notes issued in
connection with extensions of trade credit by any Grantor in
the ordinary course of business).
"Pledged Securities": the collective reference to the
Pledged Notes and the Pledged Stock.
"Pledged Stock": the shares of Capital Stock listed on
Schedule 2, together with any other shares, stock
certificates, options or rights of any nature whatsoever in
respect of the Capital Stock of any Person that may be
issued or granted to, or held by, any Grantor while this
Agreement is in effect.
"Proceeds": all "proceeds" as such term is defined in
Section 9-306(1) of the Uniform Commercial Code in effect in
the State of New York on the date hereof and, in any event,
shall include, without limitation, all dividends or other
income from the Pledged Securities, collections thereon or
distributions or payments with respect thereto.
"Receivable": any right to payment for goods sold or
leased or for services rendered, whether or not such right
is evidenced by an Instrument or Chattel Paper and whether
or not it has been earned by performance (including, without
limitation, any Account).
"Securities Act": the Securities Act of 1933, as
amended.
"Trademarks": (i) all trademarks, trade names,
corporate names, company names, business names, fictitious
business names, trade styles, service marks, logos and other
source or business identifiers, and all goodwill associated
therewith, now existing or hereafter adopted or acquired,
all registrations and recordings thereof, and all
applications in connection therewith, whether in the United
States Patent and Trademark Office or in any similar office
or agency of the United States, any State thereof or any
other country or any political subdivision thereof, or
otherwise, and all common-law rights related thereto,
including, without limitation, any of the foregoing referred
to in Schedule 6, and (ii) the right to obtain all renewals
thereof.
"Trademark License": any agreement, whether written or
oral, providing for the grant by or to any Grantor of any
right to use any Trademark, including, without limitation,
any of the foregoing referred to in Schedule 6.
1.2 Other Definitional Provisions. (a) The words
"hereof," "herein", "hereto" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement
as a whole and not to any particular provision of this Agreement,
and Section and Schedule references are to this Agreement unless
otherwise specified.
(b) The meanings given to terms defined herein shall
be equally applicable to both the singular and plural forms of
such terms.
(c) Where the context requires, terms relating to the
Collateral or any part thereof, when used in relation to a
Grantor, shall refer to such Grantor's Collateral or the relevant
part thereof.
SECTION 2. GUARANTEE
2.1 Guarantee. (a) Each of the Guarantors hereby,
jointly and severally, unconditionally and irrevocably,
guarantees to the Administrative Agent, for the ratable benefit
of the Lenders and their respective successors, indorsees,
transferees and assigns, the prompt and complete payment and
performance by the Borrower when due (whether at the stated
maturity, by acceleration or otherwise) of the Borrower
Obligations.
(b) Anything herein or in any other Loan Document to
the contrary notwithstanding, the maximum liability of each
Guarantor hereunder and under the other Loan Documents shall in
no event exceed the amount which can be guaranteed by such
Guarantor under applicable federal and state laws relating to the
insolvency of debtors (after giving effect to the right of
contribution established in Section 2.2).
(c) Each Guarantor agrees that the Borrower
Obligations may at any time and from time to time exceed the
amount of the liability of such Guarantor hereunder without
impairing the guarantee contained in this Section 2 or affecting
the rights and remedies of the Administrative Agent or any Lender
hereunder.
(d) The guarantee contained in this Section 2 shall
remain in full force and effect until all the Borrower
Obligations and the obligations of each Guarantor under the
guarantee contained in this Section 2 shall have been satisfied
by payment in full, no Letter of Credit shall be outstanding and
the Revolving Credit Commitments shall be terminated,
notwithstanding that from time to time during the term of the
Credit Agreement the Borrower may be free from any Borrower
Obligations.
(e) No payment made by the Borrower, any of the
Guarantors, any other guarantor or any other Person or received
or collected by the Administrative Agent or any Lender from the
Borrower, any of the Guarantors, any other guarantor or any other
Person by virtue of any action or proceeding or any set-off or
appropriation or application at any time or from time to time in
reduction of or in payment of the Borrower Obligations shall be
deemed to modify, reduce, release or otherwise affect the
liability of any Guarantor hereunder which shall, notwithstanding
any such payment (other than any payment made by such Guarantor
in respect of the Borrower Obligations or any payment received or
collected from such Guarantor in respect of the Borrower
Obligations), remain liable for the Borrower Obligations up to
the maximum liability of such Guarantor hereunder until the
Borrower Obligations are paid in full, no Letter of Credit shall
be outstanding and the Revolving Credit Commitments are
terminated.
2.2 Right of Contribution. Each Guarantor hereby
agrees that to the extent that a Guarantor shall have paid more
than its proportionate share of any payment made hereunder, such
Guarantor shall be entitled to seek and receive contribution from
and against any other Guarantor hereunder which has not paid its
proportionate share of such payment. Each Guarantor's right of
contribution shall be subject to the terms and conditions of
Section 2.3. The provisions of this Section 2.2 shall in no
respect limit the obligations and liabilities of any Guarantor to
the Administrative Agent and the Lenders, and each Guarantor
shall remain liable to the Administrative Agent and the Lenders
for the full amount guaranteed by such Guarantor hereunder.
2.3 No Subrogation. Notwithstanding any payment made
by any Guarantor hereunder or any set-off or application of funds
of any Guarantor by the Administrative Agent or any Lender, no
Guarantor shall be entitled to be subrogated to any of the rights
of the Administrative Agent or any Lender against the Borrower or
any other Guarantor or any collateral security or guarantee or
right of offset held by the Administrative Agent or any Lender
for the payment of the Borrower Obligations, nor shall any
Guarantor seek or be entitled to seek any contribution or
reimbursement from the Borrower or any other Guarantor in respect
of payments made by such Guarantor hereunder, until all amounts
owing to the Administrative Agent and the Lenders by the Borrower
on account of the Borrower Obligations are paid in full, no
Letter of Credit shall be outstanding and the Revolving Credit
Commitments are terminated. If any amount shall be paid to any
Guarantor on account of such subrogation rights at any time when
all of the Borrower Obligations shall not have been paid in full,
such amount shall be held by such Guarantor in trust for the
Administrative Agent and the Lenders, segregated from other funds
of such Guarantor, and shall, forthwith upon receipt by such
Guarantor, be turned over to the Administrative Agent in the
exact form received by such Guarantor (duly indorsed by such
Guarantor to the Administrative Agent, if required), to be
applied against the Borrower Obligations, whether matured or
unmatured, in such order as the Administrative Agent may
determine.
2.4 Amendments, etc. with respect to the Borrower
Obligations. Each Guarantor shall remain obligated hereunder
notwithstanding that, without any reservation of rights against
any Guarantor and without notice to or further assent by any
Guarantor, any demand for payment of any of the Borrower
Obligations made by the Administrative Agent or any Lender may be
rescinded by the Administrative Agent or such Lender and any of
the Borrower Obligations continued, and the Borrower Obligations,
or the liability of any other Person upon or for any part
thereof, or any collateral security or guarantee therefor or
right of offset with respect thereto, may, from time to time, in
whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the
Administrative Agent or any Lender, and the Credit Agreement and
the other Loan Documents and any other documents executed and
delivered in connection therewith may be amended, modified,
supplemented or terminated, in whole or in part, as the
Administrative Agent (or the Required Lenders or all Lenders, as
the case may be) may deem advisable from time to time, and any
collateral security, guarantee or right of offset at any time
held by the Administrative Agent or any Lender for the payment of
the Borrower Obligations may be sold, exchanged, waived,
surrendered or released. Neither the Administrative Agent nor
any Lender shall have any obligation to protect, secure, perfect
or insure any Lien at any time held by it as security for the
Borrower Obligations or for the guarantee contained in this
Section 2 or any property subject thereto.
2.5 Guarantee Absolute and Unconditional. Each
Guarantor waives any and all notice of the creation, renewal,
extension or accrual of any of the Borrower Obligations and
notice of or proof of reliance by the Administrative Agent or any
Lender upon the guarantee contained in this Section 2 or
acceptance of the guarantee contained in this Section 2; the
Borrower Obligations, and any of them, shall conclusively be
deemed to have been created, contracted or incurred, or renewed,
extended, amended or waived, in reliance upon the guarantee
contained in this Section 2; and all dealings between the
Borrower and any of the Guarantors, on the one hand, and the
Administrative Agent and the Lenders, on the other hand, likewise
shall be conclusively presumed to have been had or consummated in
reliance upon the guarantee contained in this Section 2. Each
Guarantor waives diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon the
Borrower or any of the Guarantors with respect to the Borrower
Obligations. Each Guarantor understands and agrees that the
guarantee contained in this Section 2 shall be construed as a
continuing, absolute and unconditional guarantee of payment
without regard to (a) the validity or enforceability of the
Credit Agreement or any other Loan Document, any of the Borrower
Obligations or any other collateral security therefor or
guarantee or right of offset with respect thereto at any time or
from time to time held by the Administrative Agent or any Lender,
(b) any defense, set-off or counterclaim (other than a defense of
payment or performance) which may at any time be available to or
be asserted by the Borrower or any other Person against the
Administrative Agent or any Lender, or (c) any other circumstance
whatsoever (with or without notice to or knowledge of the
Borrower or such Guarantor) which constitutes, or might be
construed to constitute, an equitable or legal discharge of the
Borrower for the Borrower Obligations, or of such Guarantor under
the guarantee contained in this Section 2, in bankruptcy or in
any other instance. When making any demand hereunder or
otherwise pursuing its rights and remedies hereunder against any
Guarantor, the Administrative Agent or any Lender may, but shall
be under no obligation to, make a similar demand on or otherwise
pursue such rights and remedies as it may have against the
Borrower, any other Guarantor or any other Person or against any
collateral security or guarantee for the Borrower Obligations or
any right of offset with respect thereto, and any failure by the
Administrative Agent or any Lender to make any such demand, to
pursue such other rights or remedies or to collect any payments
from the Borrower, any other Guarantor or any other Person or to
realize upon any such collateral security or guarantee or to
exercise any such right of offset, or any release of the
Borrower, any other Guarantor or any other Person or any such
collateral security, guarantee or right of offset, shall not
relieve any Guarantor of any obligation or liability hereunder,
and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of the
Administrative Agent or any Lender against any Guarantor. For
the purposes hereof "demand" shall include the commencement and
continuance of any legal proceedings.
2.6 Reinstatement. The guarantee contained in this
Section 2 shall continue to be effective, or be reinstated, as
the case may be, if at any time payment, or any part thereof, of
any of the Borrower Obligations is rescinded or must otherwise be
restored or returned by the Administrative Agent or any Lender
upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower or any Guarantor, or upon or as a
result of the appointment of a receiver, intervenor or
conservator of, or trustee or similar officer for, the Borrower
or any Guarantor or any substantial part of its property, or
otherwise, all as though such payments had not been made.
2.7 Payments. Each Guarantor hereby guarantees that
payments hereunder will be paid to the Administrative Agent
without set-off or counterclaim in Dollars at the office of the
Administrative Agent located at 000 Xxxxxxxxxx Xxxx, Xxxx Xxxx,
Xxx Xxxxxx 00000.
SECTION 3. GRANT OF SECURITY INTEREST
Each Grantor hereby assigns and transfers to the
Administrative Agent, and hereby grants to the Administrative
Agent, for the ratable benefit of the Lenders, a security
interest in, all of the following property now owned or at any
time hereafter acquired by such Grantor or in which such Grantor
now has or at any time in the future may acquire any right, title
or interest (collectively, the "Collateral"), as collateral
security for the prompt and complete payment and performance when
due (whether at the stated maturity, by acceleration or
otherwise) of such Grantor's Obligations,:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Contracts;
(d) all Documents;
(e) all Equipment;
(f) all General Intangibles;
(g) all Instruments;
(h) all Intellectual Property;
(i) all Inventory;
(j) all Pledged Securities;
(k) all books and records pertaining to the
Collateral; and
(l) to the extent not otherwise included, all Proceeds
and products of any and all of the foregoing and all
collateral security and guarantees given by any Person with
respect to any of the foregoing.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to
enter into the Credit Agreement and to induce the Lenders to make
their respective extensions of credit to the Borrower thereunder,
each Grantor hereby represents and warrants to the Administrative
Agent and each Lender that:
4.1 Representations in Credit Agreement. In the case
of each Guarantor, the representations and warranties set forth
in Section 4 of the Credit Agreement as they relate to such
Guarantor or to the Loan Documents to which such Guarantor is a
party, each of which is hereby incorporated herein by reference,
are true and correct, and the Administrative Agent and each
Lender shall be entitled to rely on each of them as if they were
fully set forth herein, provided that each reference in each such
representation and warranty to the Borrower's knowledge shall,
for the purposes of this Section 4.1, be deemed to be a reference
to such Guarantor's knowledge.
4.2 Title; No Other Liens. Except for the security
interest granted to the Administrative Agent for the ratable
benefit of the Lenders pursuant to this Agreement and the other
Liens permitted to exist on the Collateral by the Credit
Agreement, such Grantor owns each item of the Collateral free and
clear of any and all Liens or claims of others. No financing
statement or other public notice with respect to all or any part
of the Collateral is on file or of record in any public office,
except such as have been filed in favor of the Administrative
Agent, for the ratable benefit of the Lenders, pursuant to this
Agreement or as are permitted by the Credit Agreement.
4.3 Perfected First Priority Liens. The security
interests granted pursuant to this Agreement (a) upon completion
of the filings and other actions specified on Schedule 3 (which,
in the case of all filings and other documents referred to on
said Schedule, have been delivered to the Administrative Agent in
completed and duly executed form) will constitute valid perfected
security interests in all of the Collateral in favor of the
Administrative Agent, for the ratable benefit of the Lenders, as
collateral security for such Grantor's Obligations, enforceable
in accordance with the terms hereof against all creditors of such
Grantor and any Persons purporting to purchase any Collateral
from such Grantor and (b) are prior to all other Liens on the
Collateral in existence on the date hereof except for (i)
unrecorded Liens permitted by the Credit Agreement which have
priority over the Liens on the Collateral by operation of law and
(ii) other Liens permitted by the Credit Agreement.
4.4 Chief Executive Office. On the date hereof, such
Grantor's jurisdiction of organization and the location of such
Grantor's chief executive office or sole place of business are
specified on Schedule 4.
4.5 Inventory and Equipment. On the date hereof, the
Inventory and the Equipment (other than mobile goods) are kept at
the locations listed on Schedule 5.
4.6 Farm Products. None of the Collateral
constitutes, or is the Proceeds of, Farm Products.
4.7 Pledged Securities. (a) The shares of Pledged
Stock pledged by such Grantor hereunder constitute all the issued
and outstanding shares of all classes of the Capital Stock of
each Issuer owned by such Grantor.
(b) All the shares of the Pledged Stock have been duly
and validly issued and are fully paid and nonassessable.
(c) Each of the Pledged Notes constitutes the legal,
valid and binding obligation of the obligor with respect thereto,
enforceable in accordance with its terms, subject to the effects
of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles
(whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
(d) Such Grantor is the record and beneficial owner
of, and has good and marketable title to, the Pledged Securities
pledged by it hereunder, free of any and all Liens or options in
favor of, or claims of, any other Person, except the security
interest created by this Agreement.
4.8 Receivables. (a) No amount payable to such
Grantor under or in connection with any Receivable is evidenced
by any Instrument or Chattel Paper which has not been delivered
to the Administrative Agent.
(b) None of the obligors on any Receivables is a
Governmental Authority.
(c) The amounts represented by such Grantor to the
Lenders from time to time as owing to such Grantor in respect of
the Receivables will at such times be accurate.
4.9 Contracts. (a) No consent of any party (other
than such Grantor) to any Contract is required, or purports to be
required, in connection with the execution, delivery and
performance of this Agreement.
(b) Each Contract is in full force and effect and
constitutes a valid and legally enforceable obligation of the
parties thereto, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a
proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
(c) No consent or authorization of, filing with or
other act by or in respect of any Governmental Authority is
required in connection with the execution, delivery, performance,
validity or enforceability of any of the Contracts by any party
thereto other than those which have been duly obtained, made or
performed, are in full force and effect and do not subject the
scope of any such Contract to any material adverse limitation,
either specific or general in nature.
(d) Neither such Grantor nor (to the best of such
Grantor's knowledge) any of the other parties to the Contracts is
in default in the performance or observance of any of the terms
thereof in any manner that, in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
(e) The right, title and interest of such Grantor in,
to and under the Contracts are not subject to any defenses,
offsets, counterclaims or claims that, in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
(f) Such Grantor has delivered to the Administrative
Agent a complete and correct copy of each Contract, including all
amendments, supplements and other modifications thereto.
(g) No amount payable to such Grantor under or in
connection with any Contract is evidenced by any Instrument or
Chattel Paper which has not been delivered to the Administrative
Agent.
(h) None of the parties to any Contract is a
Governmental Authority.
4.10 Intellectual Property. (a) Schedule 6 lists all
Intellectual Property owned by such Grantor in its own name on
the date hereof.
(b) On the date hereof, all material Intellectual
Property is valid, subsisting, unexpired and enforceable, has not
been abandoned and does not infringe the intellectual property
rights of any other Person, except to the extent that could not
reasonably be expected to have a Material Adverse Effect.
(c) Except as set forth in Schedule 6, on the date
hereof, none of the Intellectual Property is the subject of any
licensing or franchise agreement pursuant to which such Grantor
is the licensor or franchisor, other than pursuant to any
licensing or reseller agreements entered into by such Grantor in
the ordinary course of business consistent with its past
practice.
(d) No holding, decision or judgment has been rendered
by any Governmental Authority which would limit, cancel or
question the validity of, or such Grantor's rights in, any
Intellectual Property in any respect that could reasonably be
expected to have a Material Adverse Effect.
(e) No action or proceeding is pending, or, to the
knowledge of such Grantor, threatened, on the date hereof (i)
seeking to limit, cancel or question the validity of any
Intellectual Property or such Grantor's ownership interest
therein, or (ii) which, if adversely determined, would have a
material adverse effect on the value of any Intellectual
Property.
SECTION 5. COVENANTS
Each Grantor covenants and agrees with the
Administrative Agent and the Lenders that, from and after the
date of this Agreement until the Obligations shall have been paid
in full, no Letter of Credit shall be outstanding and the
Revolving Credit Commitments shall have terminated:
5.1 Covenants in Credit Agreement. In the case of
each Guarantor, such Guarantor shall take, or shall refrain from
taking, as the case may be, each action that is necessary to be
taken or not taken, as the case may be, so that no Default or
Event of Default is caused by the failure to take such action or
to refrain from taking such action by such Guarantor or any of
its Subsidiaries.
5.2 Delivery of Instruments and Chattel Paper. If any
amount payable under or in connection with any of the Collateral
shall be or become evidenced by any Instrument or Chattel Paper,
such Instrument or Chattel Paper shall be immediately delivered
to the Administrative Agent, duly indorsed in a manner
satisfactory to the Administrative Agent, to be held as
Collateral pursuant to this Agreement.
5.3 Maintenance of Insurance. (a) Such Grantor will
maintain, with financially sound and reputable companies,
insurance policies (i) insuring the Inventory and Equipment
against loss by fire, explosion, theft and such other casualties
as may be reasonably satisfactory to the Administrative Agent and
(ii) to the extent requested by the Administrative Agent,
insuring such Grantor, the Administrative Agent and the Lenders
against liability for personal injury and property damage
relating to such Inventory and Equipment, such policies to be in
such form and amounts and having such coverage as may be
reasonably satisfactory to the Administrative Agent and the
Lenders.
(b) All such insurance shall (i) provide that no
cancellation, material reduction in amount or material change in
coverage thereof shall be effective until at least 30 days after
receipt by the Administrative Agent of written notice thereof,
(ii) name the Administrative Agent as insured party or loss
payee, (iii) if reasonably requested by the Administrative Agent,
include a breach of warranty clause and (iv) be reasonably
satisfactory in all other respects to the Administrative Agent.
(c) The Borrower shall deliver to the Administrative
Agent and the Lenders a report of a reputable insurance broker
with respect to such insurance during the month of April in each
calendar year and such supplemental reports with respect thereto
as the Administrative Agent may from time to time reasonably
request.
5.4 Payment of Obligations. Such Grantor will pay and
discharge or otherwise satisfy at or before maturity or before
they become delinquent, as the case may be, all taxes,
assessments and governmental charges or levies imposed upon the
Collateral or in respect of income or profits therefrom, as well
as all claims of any kind (including, without limitation, claims
for labor, materials and supplies) against or with respect to the
Collateral, except that no such charge need be paid if the amount
or validity thereof is currently being contested in good faith by
appropriate proceedings, reserves in conformity with GAAP with
respect thereto have been provided on the books of such Grantor
and such proceedings could not reasonably be expected to result
in the sale, forfeiture or loss of any material portion of the
Collateral or any interest therein.
5.5 Maintenance of Perfected Security Interest;
Further Documentation. (a) Such Grantor shall maintain the
security interest created by this Agreement as a perfected
security interest having at least the priority described in
Section 4.3 and shall defend such security interest against the
claims and demands of all Persons whomsoever.
(b) Such Grantor will furnish to the Administrative
Agent and the Lenders from time to time statements and schedules
further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Administrative
Agent may reasonably request, all in reasonable detail.
(c) At any time and from time to time, upon the
written request of the Administrative Agent, and at the sole
expense of such Grantor, such Grantor will promptly and duly
execute and deliver, and have recorded, such further instruments
and documents and take such further actions as the Administrative
Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights
and powers herein granted, including, without limitation, the
filing of any financing or continuation statements under the
Uniform Commercial Code (or other similar laws) in effect in any
jurisdiction with respect to the security interests created
hereby.
5.6 Changes in Locations, Name, etc. Such Grantor
will not, except upon 15 days' prior written notice to the
Administrative Agent and delivery to the Administrative Agent of
(a) all additional executed financing statements and other
documents reasonably requested by the Administrative Agent to
maintain the validity, perfection and priority of the security
interests provided for herein and (b) if applicable, a written
supplement to Schedule 5 showing any additional location at which
Inventory or Equipment shall be kept:
(i) permit any of the Inventory or Equipment to be kept
at a location other than those listed on Schedule 5;
(ii) change the location of its chief executive office
or sole place of business from that referred to in Section
4.4; or
(iii) change its name, identity or corporate structure
to such an extent that any financing statement filed by the
Administrative Agent in connection with this Agreement would
become misleading.
5.7 Notices. Such Grantor will advise the
Administrative Agent and the Lenders promptly, in reasonable
detail, of:
(a) any Lien (other than security interests created
hereby or Liens permitted under the Credit Agreement) on any of
the Collateral which would adversely affect the ability of the
Administrative Agent to exercise any of its remedies hereunder;
and
(b) of the occurrence of any other event which could
reasonably be expected to have a material adverse effect on the
aggregate value of the Collateral or on the security interests
created hereby.
5.8 Pledged Securities. (a) If such Grantor shall
become entitled to receive or shall receive any stock certificate
(including, without limitation, any certificate representing a
stock dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any
certificate issued in connection with any reorganization), option
or rights in respect of the Capital Stock of any Issuer, whether
in addition to, in substitution of, as a conversion of, or in
exchange for, any shares of the Pledged Stock, or otherwise in
respect thereof, such Grantor shall accept the same as the agent
of the Administrative Agent and the Lenders, hold the same in
trust for the Administrative Agent and the Lenders and deliver
the same forthwith to the Administrative Agent in the exact form
received, duly indorsed by such Grantor to the Administrative
Agent, if required, together with an undated stock power covering
such certificate duly executed in blank by such Grantor and with,
if the Administrative Agent so requests, signature guaranteed, to
be held by the Administrative Agent, subject to the terms hereof,
as additional collateral security for the Obligations. Any sums
paid upon or in respect of the Pledged Securities upon the
liquidation or dissolution of any Issuer shall be paid over to
the Administrative Agent to be held by it hereunder as additional
collateral security for the Obligations, and in case any
distribution of capital shall be made on or in respect of the
Pledged Securities or any property shall be distributed upon or
with respect to the Pledged Securities pursuant to the
recapitalization or reclassification of the capital of any Issuer
or pursuant to the reorganization thereof, the property so
distributed shall, unless otherwise subject to a perfected
security interest in favor of the Administrative Agent, be
delivered to the Administrative Agent to be held by it hereunder
as additional collateral security for the Obligations. If any
sums of money or property so paid or distributed in respect of
the Pledged Securities shall be received by such Grantor, such
Grantor shall, until such money or property is paid or delivered
to the Administrative Agent, hold such money or property in trust
for the Lenders, segregated from other funds of such Grantor, as
additional collateral security for the Obligations.
(b) Without the prior written consent of the
Administrative Agent, such Grantor will not (i) vote to enable,
or take any other action to permit, any Issuer to issue any stock
or other equity securities of any nature or to issue any other
securities convertible into or granting the right to purchase or
exchange for any stock or other equity securities of any nature
of any Issuer, (ii) sell, assign, transfer, exchange, or
otherwise dispose of, or grant any option with respect to, the
Pledged Securities or Proceeds thereof (except pursuant to a
transaction expressly permitted by the Credit Agreement), (iii)
create, incur or permit to exist any Lien or option in favor of,
or any claim of any Person with respect to, any of the Pledged
Securities or Proceeds thereof, or any interest therein, except
for the security interests created by this Agreement or (iv)
enter into any agreement or undertaking restricting the right or
ability of such Grantor or the Administrative Agent to sell,
assign or transfer any of the Pledged Securities or Proceeds
thereof.
(c) In the case of each Grantor which is an Issuer,
such Issuer agrees that (i) it will be bound by the terms of this
Agreement relating to the Pledged Securities issued by it and
will comply with such terms insofar as such terms are applicable
to it, (ii) it will notify the Administrative Agent promptly in
writing of the occurrence of any of the events described in
Section 5.8(a) with respect to the Pledged Securities issued by
it and (iii) the terms of Sections 6.3(c) and 6.7 shall apply to
it, mutatis mutandis, with respect to all actions that may be
required of it pursuant to Section 6.3(c) or 6.7 with respect to
the Pledged Securities issued by it.
5.9 Receivables. (a) Other than in the ordinary
course of business consistent with its past practice, such
Grantor will not (i) grant any extension of the time of payment
of any Receivable, (ii) compromise or settle any Receivable for
less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any Receivable,
(iv) allow any credit or discount whatsoever on any Receivable or
(v) amend, supplement or modify any Receivable in any manner that
could adversely affect the value thereof.
(b) Such Grantor will deliver to the Administrative
Agent a copy of each material demand, notice or document received
by it that questions or calls into doubt the validity or
enforceability of more than 5% of the aggregate amount of the
then outstanding Receivables.
5.10 Contracts. Except in the ordinary course of
business consistent with its past practice:
(a) Such Grantor will perform and comply in all
material respects with all its obligations under the Contracts.
(b) Such Grantor will not amend, modify, terminate or
waive any provision of any Contract in any manner which could
reasonably be expected to materially adversely affect the value
of such Contract as Collateral.
(c) Such Grantor will exercise promptly and diligently
each and every material right which it may have under each
Contract (other than any right of termination).
(d) Such Grantor will deliver to the Administrative
Agent a copy of each material demand, notice or document received
by it relating in any way to any Contract that questions the
validity or enforceability of such Contract.
5.11 Intellectual Property. (a) Such Grantor (either
itself or through licensees) will (i) continue to use each
material Trademark on each and every trademark class of goods
applicable to its current line as reflected in its current
catalogs, brochures and price lists in order to maintain such
Trademark in full force free from any claim of abandonment for
non-use, (ii) maintain as in the past the quality of products and
services offered under such Trademark, (iii) use such Trademark
with the appropriate notice of registration and all other notices
and legends required by applicable Requirements of Law, (iv) not
adopt or use any xxxx which is confusingly similar or a colorable
imitation of such Trademark unless the Administrative Agent, for
the ratable benefit of the Lenders, shall obtain a perfected
security interest in such xxxx pursuant to this Agreement, and
(v) not (and not permit any licensee or sublicensee thereof to)
do any act or knowingly omit to do any act whereby such Trademark
may become invalidated or impaired in any way.
(b) Except in the ordinary course of business
consistent with its past practice, such Grantor (either itself or
through licensees) will not do any act, or omit to do any act,
whereby any material Patent may become forfeited, abandoned or
dedicated to the public.
(c) Such Grantor (either itself or through licensees)
(i) will employ each material Copyright and (ii) will not (and
will not permit any licensee or sublicensee thereof to) do any
act or knowingly omit to do any act whereby any material portion
of the Copyrights may become invalidated or otherwise impaired.
Such Grantor will not (either itself or through licensees) do any
act whereby any material portion of the Copyrights may fall into
the public domain.
(d) Such Grantor (either itself or through licensees)
will not do any act that knowingly uses any material Intellectual
Property to infringe the intellectual property rights of any
other Person.
(e) Such Grantor will notify the Administrative Agent
and the Lenders immediately if it knows, or has reason to know,
that any application or registration relating to any material
Intellectual Property may become forfeited, abandoned or
dedicated to the public, or of any adverse determination or
development (including, without limitation, the institution of,
or any such determination or development in, any proceeding in
the United States Patent and Trademark Office, the United States
Copyright Office or any court or tribunal in any country)
regarding such Grantor's ownership of, or the validity of, any
material Intellectual Property or such Grantor's right to
register the same or to own and maintain the same.
(f) Whenever such Grantor, either by itself or through
any agent, employee, licensee or designee, shall file an
application for the registration of any Intellectual Property
with the United States Patent and Trademark Office, the United
States Copyright Office or any similar office or agency in any
other country or any political subdivision thereof, such Grantor
shall report such filing to the Administrative Agent within five
Business Days after the last day of the fiscal quarter in which
such filing occurs. Upon request of the Administrative Agent,
such Grantor shall execute and deliver, and have recorded, any
and all agreements, instruments, documents, and papers as the
Administrative Agent may request to evidence the Administrative
Agent's and the Lenders' security interest in any Copyright,
Patent or Trademark and the goodwill and general intangibles of
such Grantor relating thereto or represented thereby.
(g) Such Grantor will take all reasonable and
necessary steps, including, without limitation, in any proceeding
before the United States Patent and Trademark Office, the United
States Copyright Office or any similar office or agency in any
other country or any political subdivision thereof, to maintain
and pursue each application (and to obtain the relevant
registration) and to maintain each registration of the material
Intellectual Property, including, without limitation, filing of
applications for renewal, affidavits of use and affidavits of
incontestability.
(h) In the event that any material Intellectual
Property is infringed, misappropriated or diluted by a third
party, such Grantor shall (i) take such actions as such Grantor
shall reasonably deem appropriate under the circumstances to
protect such Intellectual Property and (ii) if such Intellectual
Property is of material economic value, promptly notify the
Administrative Agent after it learns thereof and xxx for
infringement, misappropriation or dilution, to seek injunctive
relief where appropriate and to recover any and all damages for
such infringement, misappropriation or dilution.
SECTION 6. REMEDIAL PROVISIONS
6.1 Certain Matters Relating to Receivables. (a) The
Administrative Agent shall have the right to make test
verifications of the Receivables in any manner and through any
medium that it reasonably considers advisable, and each Grantor
shall furnish all such assistance and information as the
Administrative Agent may require in connection with such test
verifications. At any time and from time to time, upon the
Administrative Agent's request and at the expense of the relevant
Grantor, such Grantor shall cause independent public accountants
or others satisfactory to the Administrative Agent to furnish to
the Administrative Agent reports showing reconciliations, aging
and test verifications of, and trial balances for, the
Receivables.
(b) The Administrative Agent hereby authorizes each
Grantor to collect such Grantor's Receivables, subject to the
Administrative Agent's direction and control, and the
Administrative Agent may curtail or terminate said authority at
any time after the occurrence and during the continuance of an
Event of Default. If required by the Administrative Agent at any
time after the occurrence and during the continuance of an Event
of Default, any payments of Receivables, when collected by any
Grantor, (i) shall be forthwith (and, in any event, within two
Business Days) deposited by such Grantor in the exact form
received, duly indorsed by such Grantor to the Administrative
Agent if required, in a Collateral Account maintained under the
sole dominion and control of the Administrative Agent, subject to
withdrawal by the Administrative Agent for the account of the
Lenders only as provided in Section 6.5, and (ii) until so turned
over, shall be held by such Grantor in trust for the
Administrative Agent and the Lenders, segregated from other funds
of such Grantor. Each such deposit of Proceeds of Receivables
shall be accompanied by a report identifying in reasonable detail
the nature and source of the payments included in the deposit.
(c) At the Administrative Agent's request, each
Grantor shall deliver to the Administrative Agent all original
and other documents evidencing, and relating to, the agreements
and transactions which gave rise to the Receivables, including,
without limitation, all original orders, invoices and shipping
receipts.
6.2 Communications with Obligors; Grantors Remain
Liable. (a) The Administrative Agent in its own name or in the
name of others may at any time after the occurrence and during
the continuance of an Event of Default communicate with obligors
under the Receivables and parties to the Contracts to verify with
them to the Administrative Agent's satisfaction the existence,
amount and terms of any Receivables or Contracts.
(b) Upon the request of the Administrative Agent at
any time after the occurrence and during the continuance of an
Event of Default, each Grantor shall notify obligors on the
Receivables and parties to the Contracts that the Receivables and
the Contracts have been assigned to the Administrative Agent for
the ratable benefit of the Lenders and that payments in respect
thereof shall be made directly to the Administrative Agent.
(c) Anything herein to the contrary notwithstanding,
each Grantor shall remain liable under each of the Receivables
and Contracts to observe and perform all the conditions and
obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise thereto.
Neither the Administrative Agent nor any Lender shall have any
obligation or liability under any Receivable (or any agreement
giving rise thereto) or Contract by reason of or arising out of
this Agreement or the receipt by the Administrative Agent or any
Lender of any payment relating thereto, nor shall the
Administrative Agent or any Lender be obligated in any manner to
perform any of the obligations of any Grantor under or pursuant
to any Receivable (or any agreement giving rise thereto) or
Contract, to make any payment, to make any inquiry as to the
nature or the sufficiency of any payment received by it or as to
the sufficiency of any performance by any party thereunder, to
present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may
have been assigned to it or to which it may be entitled at any
time or times.
6.3 Pledged Stock. (a) Unless an Event of Default
shall have occurred and be continuing and the Administrative
Agent shall have given notice to the relevant Grantor of the
Administrative Agent's intent to exercise its corresponding
rights pursuant to Section 6.3(b), each Grantor shall be
permitted to receive all cash dividends paid in respect of the
Pledged Stock and all payments made in respect of the Pledged
Notes, in each case paid in the normal course of business of the
relevant Issuer and consistent with past practice, to the extent
permitted in the Credit Agreement, and to exercise all voting and
corporate rights with respect to the Pledged Securities;
provided, however, that no vote shall be cast or corporate right
exercised or other action taken which, in the Administrative
Agent's reasonable judgment, would impair the Collateral or which
would be inconsistent with or result in any violation of any
provision of the Credit Agreement, this Agreement or any other
Loan Document.
(b) If an Event of Default shall occur and be
continuing and the Administrative Agent shall give notice of its
intent to exercise such rights to the relevant Grantor or
Grantors, (i) the Administrative Agent shall have the right to
receive any and all cash dividends, payments or other Proceeds
paid in respect of the Pledged Securities and make application
thereof to the Obligations in such order as the Administrative
Agent may determine, and (ii) any or all of the Pledged
Securities shall be registered in the name of the Administrative
Agent or its nominee, and the Administrative Agent or its nominee
may thereafter exercise (x) all voting, corporate and other
rights pertaining to such Pledged Securities at any meeting of
shareholders of the relevant Issuer or Issuers or otherwise and
(y) any and all rights of conversion, exchange and subscription
and any other rights, privileges or options pertaining to such
Pledged Securities as if it were the absolute owner thereof
(including, without limitation, the right to exchange at its
discretion any and all of the Pledged Securities upon the merger,
consolidation, reorganization, recapitalization or other
fundamental change in the corporate structure of any Issuer, or
upon the exercise by any Grantor or the Administrative Agent of
any right, privilege or option pertaining to such Pledged
Securities, and in connection therewith, the right to deposit and
deliver any and all of the Pledged Securities with any committee,
depositary, transfer agent, registrar or other designated agency
upon such terms and conditions as the Administrative Agent may
determine), all without liability except to account for property
actually received by it, but the Administrative Agent shall have
no duty to any Grantor to exercise any such right, privilege or
option and shall not be responsible for any failure to do so or
delay in so doing.
(c) Each Grantor hereby authorizes and instructs each
Issuer of any Pledged Securities pledged by such Grantor
hereunder to (i) comply with any instruction received by it from
the Administrative Agent in writing that (x) states that an Event
of Default has occurred and is continuing and (y) is otherwise in
accordance with the terms of this Agreement, without any other or
further instructions from such Grantor, and each Grantor agrees
that each Issuer shall be fully protected in so complying, and
(ii) unless otherwise expressly permitted hereby, pay any
dividends or other payments with respect to the Pledged
Securities directly to the Administrative Agent.
6.4 Proceeds to be Turned Over To Administrative
Agent. In addition to the rights of the Administrative Agent and
the Lenders specified in Section 6.1 with respect to payments of
Receivables, if an Event of Default shall occur and be
continuing, all Proceeds received by any Grantor consisting of
cash, checks and other near-cash items shall be held by such
Grantor in trust for the Administrative Agent and the Lenders,
segregated from other funds of such Grantor, and shall, forthwith
upon receipt by such Grantor, be turned over to the
Administrative Agent in the exact form received by such Grantor
(duly indorsed by such Grantor to the Administrative Agent, if
required). All Proceeds received by the Administrative Agent
hereunder shall be held by the Administrative Agent in a
Collateral Account maintained under its sole dominion and
control. All Proceeds while held by the Administrative Agent in
a Collateral Account (or by such Grantor in trust for the
Administrative Agent and the Lenders) shall continue to be held
as collateral security for all the Obligations and shall not
constitute payment thereof until applied as provided in Section
6.5.
6.5 Application of Proceeds. At such intervals as may
be agreed upon by the Borrower and the Administrative Agent, or,
if an Event of Default shall have occurred and be continuing, at
any time at the Administrative Agent's election, the
Administrative Agent may apply all or any part of Proceeds held
in any Collateral Account in payment of the Obligations in such
order as the Administrative Agent may elect, and any part of such
funds which the Administrative Agent elects not so to apply and
deems not required as collateral security for the Obligations
shall be paid over from time to time by the Administrative Agent
to the Borrower or to whomsoever may be lawfully entitled to
receive the same. Any balance of such Proceeds remaining after
the Obligations shall have been paid in full, no Letters of
Credit shall be outstanding and the Revolving Credit Commitments
shall have terminated shall be paid over to the Borrower or to
whomsoever may be lawfully entitled to receive the same.
6.6 Code and Other Remedies. If an Event of Default
shall occur and be continuing, the Administrative Agent, on
behalf of the Lenders, may exercise, in addition to all other
rights and remedies granted to them in this Agreement and in any
other instrument or agreement securing, evidencing or relating to
the Obligations, all rights and remedies of a secured party under
the New York UCC or any other applicable law. Without limiting
the generality of the foregoing, the Administrative Agent,
without demand of performance or other demand, presentment,
protest, advertisement or notice of any kind (except any notice
required by law referred to below) to or upon any Grantor or any
other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such
circumstances forthwith collect, receive, appropriate and realize
upon the Collateral, or any part thereof, and/or may forthwith
sell, lease, assign, give option or options to purchase, or
otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more
parcels at public or private sale or sales, at any exchange,
broker's board or office of the Administrative Agent or any
Lender or elsewhere upon such terms and conditions as it may deem
advisable and at such prices as it may deem best, for cash or on
credit or for future delivery without assumption of any credit
risk. The Administrative Agent or any Lender shall have the
right upon any such public sale or sales, and, to the extent
permitted by law, upon any such private sale or sales, to
purchase the whole or any part of the Collateral so sold, free of
any right or equity of redemption in any Grantor, which right or
equity is hereby waived and released. Each Grantor further
agrees, at the Administrative Agent's request, to assemble the
Collateral and make it available to the Administrative Agent at
places which the Administrative Agent shall reasonably select,
whether at such Grantor's premises or elsewhere. The
Administrative Agent shall apply the net proceeds of any action
taken by it pursuant to this Section 6.6, after deducting all
reasonable costs and expenses of every kind incurred in
connection therewith or incidental to the care or safekeeping of
any of the Collateral or in any way relating to the Collateral or
the rights of the Administrative Agent and the Lenders hereunder,
including, without limitation, reasonable attorneys' fees and
disbursements, to the payment in whole or in part of the
Obligations, in such order as the Administrative Agent may elect,
and only after such application and after the payment by the
Administrative Agent of any other amount required by any
provision of law, including, without limitation, Section 9-504(1)(c) of the New
York UCC, need the Administrative Agent account for the surplus, if any, to
any Grantor. To the extent permitted by applicable law, each Grantor waives
all claims, damages and demands it may acquire against the Administrative
Agent or any Lender arising out of the exercise by them of any
rights hereunder. If any notice of a proposed sale or other
disposition of Collateral shall be required by law, such notice
shall be deemed reasonable and proper if given at least 10 days
before such sale or other disposition.
6.7 Registration Rights. (a) If the Administrative
Agent shall determine to exercise its right to sell any or all of
the Pledged Stock pursuant to Section 6.6, and if in the opinion
of the Administrative Agent it is necessary or advisable to have
the Pledged Stock, or that portion thereof to be sold, registered
under the provisions of the Securities Act, the relevant Grantor
will cause the Issuer thereof to (i) execute and deliver, and
cause the directors and officers of such Issuer to execute and
deliver, all such instruments and documents, and do or cause to
be done all such other acts as may be, in the opinion of the
Administrative Agent, necessary or advisable to register the
Pledged Stock, or that portion thereof to be sold, under the
provisions of the Securities Act, (ii) use its best efforts to
cause the registration statement relating thereto to become
effective and to remain effective for a period of one year from
the date of the first public offering of the Pledged Stock, or
that portion thereof to be sold, and (iii) make all amendments
thereto and/or to the related prospectus which, in the opinion of
the Administrative Agent, are necessary or advisable, all in
conformity with the requirements of the Securities Act and the
rules and regulations of the Securities and Exchange Commission
applicable thereto. Each Grantor agrees to cause such Issuer to
comply with the provisions of the securities or "Blue Sky" laws
of any and all jurisdictions which the Administrative Agent shall
designate and to make available to its security holders, as soon
as practicable, an earnings statement (which need not be audited)
which will satisfy the provisions of Section 11(a) of the
Securities Act.
(b) Each Grantor recognizes that the Administrative
Agent may be unable to effect a public sale of any or all the
Pledged Stock, by reason of certain prohibitions contained in the
Securities Act and applicable state securities laws or otherwise,
and may be compelled to resort to one or more private sales
thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for
their own account for investment and not with a view to the
distribution or resale thereof. Each Grantor acknowledges and
agrees that any such private sale may result in prices and other
terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private
sale shall be deemed to have been made in a commercially
reasonable manner. The Administrative Agent shall be under no
obligation to delay a sale of any of the Pledged Stock for the
period of time necessary to permit the Issuer thereof to register
such securities for public sale under the Securities Act, or
under applicable state securities laws, even if such Issuer would
agree to do so.
(c) Each Grantor agrees to use its best efforts to do
or cause to be done all such other acts as may be necessary to
make such sale or sales of all or any portion of the Pledged
Stock pursuant to this Section 6.7 valid and binding and in
compliance with any and all other applicable Requirements of Law.
Each Grantor further agrees that a breach of any of the covenants
contained in this Section 6.7 will cause irreparable injury to
the Administrative Agent and the Lenders, that the Administrative
Agent and the Lenders have no adequate remedy at law in respect
of such breach and, as a consequence, that each and every
covenant contained in this Section 6.7 shall be specifically
enforceable against such Grantor, and such Grantor hereby waives
and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that
no Event of Default has occurred under the Credit Agreement.
6.8 Waiver; Deficiency. Each Grantor waives and
agrees not to assert any rights or privileges which it may
acquire under Section 9-112 of the New York UCC. Each Grantor
shall remain liable for any deficiency if the proceeds of any
sale or other disposition of the Collateral are insufficient to
pay its Obligations and the fees and disbursements of any
attorneys employed by the Administrative Agent or any Lender to
collect such deficiency.
SECTION 7. THE ADMINISTRATIVE AGENT
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc. (a)
Each Grantor hereby irrevocably constitutes and appoints the Administrative
Agent and any officer or agent thereof, with full power of substitution, as
its true and lawful attorney-in-fact with full irrevocable power and
authority in the place and stead of such Grantor and in the name of such
Grantor or in its own name, for the purpose of carrying out the terms of
this Agreement, to take any and all appropriate action and to
execute any and all documents and instruments which may be
necessary or desirable to accomplish the purposes of this
Agreement, and, without limiting the generality of the foregoing,
each Grantor hereby gives the Administrative Agent the power and
right, on behalf of such Grantor, without notice to or assent by
such Grantor, to do any or all of the following:
(i) in the name of such Grantor or its own name, or
otherwise, take possession of and indorse and collect any
checks, drafts, notes, acceptances or other instruments for
the payment of moneys due under any Receivable or Contract
or with respect to any other Collateral and file any claim
or take any other action or proceeding in any court of law
or equity or otherwise deemed appropriate by the
Administrative Agent for the purpose of collecting any and
all such moneys due under any Receivable or Contract or with
respect to any other Collateral whenever payable;
(ii) in the case of any Intellectual Property, execute
and deliver, and have recorded, any and all agreements,
instruments, documents and papers as the Administrative
Agent may request to evidence the Administrative Agent's and
the Lenders' security interest in such Intellectual Property
and the goodwill and general intangibles of such Grantor
relating thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or
placed on or threatened against the Collateral, effect any
repairs or any insurance called for by the terms of this
Agreement and pay all or any part of the premiums therefor
and the costs thereof;
(iv) execute, in connection with any sale provided for
in Section 6.6 or 6.7, any indorsements, assignments or
other instruments of conveyance or transfer with respect to
the Collateral; and
(v) (1) direct any party liable for any payment under
any of the Collateral to make payment of any and all moneys
due or to become due thereunder directly to the
Administrative Agent or as the Administrative Agent shall
direct; (2) ask or demand for, collect, and receive payment
of and receipt for, any and all moneys, claims and other
amounts due or to become due at any time in respect of or
arising out of any Collateral; (3) sign and indorse any
invoices, freight or express bills, bills of lading, storage
or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection
with any of the Collateral; (4) commence and prosecute any
suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral or
any portion thereof and to enforce any other right in
respect of any Collateral; (5) defend any suit, action or
proceeding brought against such Grantor with respect to any
Collateral; (6) settle, compromise or adjust any such suit,
action or proceeding and, in connection therewith, give such
discharges or releases as the Administrative Agent may deem
appropriate; (7) assign any Copyright, Patent or Trademark
(along with the goodwill of the business to which any such
Copyright, Patent or Trademark pertains), throughout the
world for such term or terms, on such conditions, and in
such manner, as the Administrative Agent shall in its sole
discretion determine; and (8) generally, sell, transfer,
pledge and make any agreement with respect to or otherwise
deal with any of the Collateral as fully and completely as
though the Administrative Agent were the absolute owner
thereof for all purposes, and do, at the Administrative
Agent's option and such Grantor's expense, at any time, or
from time to time, all acts and things which the
Administrative Agent deems necessary to protect, preserve or
realize upon the Collateral and the Administrative Agent's
and the Lenders' security interests therein and to effect
the intent of this Agreement, all as fully and effectively
as such Grantor might do.
Anything in this Section 7.1(a) to the contrary
notwithstanding, the Administrative Agent agrees that it will not
exercise any rights under the power of attorney provided for in
this Section 7.1(a) unless an Event of Default shall have
occurred and be continuing.
(b) If any Grantor fails to perform or comply with any
of its agreements contained herein, the Administrative Agent, at
its option, but without any obligation so to do, may perform or
comply, or otherwise cause performance or compliance, with such
agreement.
(c) The expenses of the Administrative Agent incurred
in connection with actions undertaken as provided in this Section
7.1, together with interest thereon at a rate per annum equal to
the rate per annum at which interest would then be payable on
past due Base Rate Loans under the Credit Agreement, from the
date of payment by the Administrative Agent to the date
reimbursed by the relevant Grantor, shall be payable by such
Grantor to the Administrative Agent on demand.
(d) Each Grantor hereby ratifies all that said
attorneys shall lawfully do or cause to be done by virtue hereof.
All powers, authorizations and agencies contained in this
Agreement are coupled with an interest and are irrevocable until
this Agreement is terminated and the security interests created
hereby are released.
7.2 Duty of Administrative Agent. The Administrative
Agent's sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under
Section 9-207 of the New York UCC or otherwise, shall be to deal
with it in the same manner as the Administrative Agent deals with
similar property for its own account. Neither the Administrative
Agent, any Lender nor any of their respective officers,
directors, employees or agents shall be liable for failure to
demand, collect or realize upon any of the Collateral or for any
delay in doing so or shall be under any obligation to sell or
otherwise dispose of any Collateral upon the request of any
Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof.
The powers conferred on the Administrative Agent and the Lenders
hereunder are solely to protect the Administrative Agent's and
the Lenders' interests in the Collateral and shall not impose any
duty upon the Administrative Agent or any Lender to exercise any
such powers. The Administrative Agent and the Lenders shall be
accountable only for amounts that they actually receive as a
result of the exercise of such powers, and neither they nor any
of their officers, directors, employees or agents shall be
responsible to any Grantor for any act or failure to act
hereunder, except for their own gross negligence or willful
misconduct.
7.3 Execution of Financing Statements. Pursuant to
Section 9-402 of the New York UCC and any other applicable law,
each Grantor authorizes the Administrative Agent to file or
record financing statements and other filing or recording
documents or instruments with respect to the Collateral without
the signature of such Grantor in such form and in such offices as
the Administrative Agent reasonably determines appropriate to
perfect the security interests of the Administrative Agent under
this Agreement. A photographic or other reproduction of this
Agreement shall be sufficient as a financing statement or other
filing or recording document or instrument for filing or
recording in any jurisdiction.
7.4 Authority of Administrative Agent. Each Grantor
acknowledges that the rights and responsibilities of the
Administrative Agent under this Agreement with respect to any
action taken by the Administrative Agent or the exercise or non-exercise by the
Administrative Agent of any option, voting right, request, judgment or other
right or remedy provided for herein or resulting or arising out of this
Agreement shall, as between the Administrative Agent and the Lenders, be
governed by the Credit Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Grantors, the Administrative Agent
shall be conclusively presumed to be acting as agent for the
Lenders with full and valid authority so to act or refrain from
acting, and no Grantor shall be under any obligation, or
entitlement, to make any inquiry respecting such authority.
SECTION 8. MISCELLANEOUS
8.1 Amendments in Writing. None of the terms or
provisions of this Agreement may be waived, amended, supplemented
or otherwise modified except in accordance with Section 10.1 of
the Credit Agreement.
8.2 Notices. All notices, requests and demands to or
upon the Administrative Agent or any Grantor hereunder shall be
effected in the manner provided for in Section 10.2 of the Credit
Agreement; provided that any such notice, request or demand to or
upon any Guarantor shall be addressed to such Guarantor at its
notice address set forth on Schedule 1.
8.3 No Waiver by Course of Conduct; Cumulative
Remedies. Neither the Administrative Agent nor any Lender shall
by any act (except by a written instrument pursuant to Section
8.1), delay, indulgence, omission or otherwise be deemed to have
waived any right or remedy hereunder or to have acquiesced in any
Default or Event of Default. No failure to exercise, nor any
delay in exercising, on the part of the Administrative Agent or
any Lender, any right, power or privilege hereunder shall operate
as a waiver thereof. No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege. A waiver by the Administrative Agent or any Lender of
any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the
Administrative Agent or such Lender would otherwise have on any
future occasion. The rights and remedies herein provided are
cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by law.
8.4 Enforcement Expenses; Indemnification. (a) Each
Guarantor agrees to pay or reimburse each Lender and the
Administrative Agent for all its costs and expenses incurred in
collecting against such Guarantor under the guarantee contained
in Section 2 or otherwise enforcing or preserving any rights
under this Agreement and the other Loan Documents to which such
Guarantor is a party, including, without limitation, the fees and
disbursements of counsel (including the allocated fees and
expenses of in-house counsel) to each Lender and of counsel to
the Administrative Agent.
(b) Each Guarantor agrees to pay, and to save the
Administrative Agent and the Lenders harmless from, any and all
liabilities with respect to, or resulting from any delay in
paying, any and all stamp, excise, sales or other taxes which may
be payable or determined to be payable with respect to any of the
Collateral or in connection with any of the transactions
contemplated by this Agreement.
(c) Each Guarantor agrees to pay, and to save the
Administrative Agent and the Lenders harmless from, any and all
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Agreement to
the extent the Borrower would be required to do so pursuant to
Section 10.5 of the Credit Agreement.
(d) The agreements in this Section 8.4 shall survive
repayment of the Obligations and all other amounts payable under
the Credit Agreement and the other Loan Documents.
8.5 Successors and Assigns. This Agreement shall be
binding upon the successors and assigns of each Grantor and shall
inure to the benefit of the Administrative Agent and the Lenders
and their successors and assigns; provided that no Grantor may
assign, transfer or delegate any of its rights or obligations
under this Agreement without the prior written consent of the
Administrative Agent except as expressly permitted by Section
7.4(a) of the Credit Agreement.
8.6 Set-Off. Each Grantor hereby irrevocably
authorizes the Administrative Agent and each Lender at any time
and from time to time while an Event of Default pursuant to
subsection 8(a) of the Credit Agreement shall have occurred and
be continuing, without notice to such Grantor or any other
Grantor, any such notice being expressly waived by each Grantor,
to set-off and appropriate and apply any and all deposits
(general or special, time or demand, provisional or final), in
any currency, and any other credits, indebtedness or claims, in
any currency, in each case whether direct or indirect, absolute
or contingent, matured or unmatured, at any time held or owing by
the Administrative Agent or such Lender to or for the credit or
the account of such Grantor, or any part thereof in such amounts
as the Administrative Agent or such Lender may elect, against and
on account of the obligations and liabilities of such Grantor to
the Administrative Agent or such Lender hereunder and claims of
every nature and description of the Administrative Agent or such
Lender against such Grantor, in any currency, whether arising
hereunder, under the Credit Agreement, any other Loan Document or
otherwise, as the Administrative Agent or such Lender may elect,
whether or not the Administrative Agent or any Lender has made
any demand for payment and although such obligations, liabilities
and claims may be contingent or unmatured. The Administrative
Agent and each Lender shall notify such Grantor promptly of any
such set-off and the application made by the Administrative Agent
or such Lender of the proceeds thereof, provided that the failure
to give such notice shall not affect the validity of such set-off
and application. The rights of the Administrative Agent and each
Lender under this Section 8.6 are in addition to other rights and
remedies (including, without limitation, other rights of set-off)
which the Administrative Agent or such Lender may have.
8.7 Counterparts. This Agreement may be executed by
one or more of the parties to this Agreement on any number of
separate counterparts (including by telecopy), and all of said
counterparts taken together shall be deemed to constitute one and
the same instrument.
8.8 Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such
prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
8.9 Section Headings. The Section headings used in
this Agreement are for convenience of reference only and are not
to affect the construction hereof or be taken into consideration
in the interpretation hereof.
8.10 Integration. This Agreement and the other Loan
Documents represent the agreement of the Grantors, the
Administrative Agent and the Lenders with respect to the subject
matter hereof and thereof, and there are no promises,
undertakings, representations or warranties by the Administrative
Agent or any Lender relative to subject matter hereof and thereof
not expressly set forth or referred to herein or in the other
Loan Documents.
8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK.
8.12 Submission To Jurisdiction; Waivers. Each
Grantor hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal
action or proceeding relating to this Agreement and the
other Loan Documents to which it is a party, or for
recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the
Courts of the State of New York, the courts of the
United States of America for the Southern District of
New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may
now or hereafter have to the venue of any such action or
proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees
not to plead or claim the same;
(c) agrees that service of process in any such action
or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar
form of mail), postage prepaid, to such Grantor at its
address referred to in Section 8.2 or at such other address
of which the Administrative Agent shall have been notified
pursuant thereto;
(d) agrees that nothing herein shall affect the right
to effect service of process in any other manner permitted
by law or shall limit the right to xxx in any other
jurisdiction; and
(e) waives, to the maximum extent not prohibited by
law, any right it may have to claim or recover in any legal
action or proceeding referred to in this Section any
special, exemplary, punitive or consequential damages.
8.13 Acknowledgments. Each Grantor hereby
acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan
Documents to which it is a party;
(b) neither the Administrative Agent nor any Lender
has any fiduciary relationship with or duty to any Grantor
arising out of or in connection with this Agreement or any
of the other Loan Documents, and the relationship between
the Grantors, on the one hand, and the Administrative Agent
and Lenders, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other
Loan Documents or otherwise exists by virtue of the
transactions contemplated hereby among the Lenders or among
the Grantors and the Lenders.
8.14 WAIVER OF JURY TRIAL. EACH GRANTOR HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
8.15 Additional Grantors. Each Subsidiary of the
Borrower that is required to become a party to this Agreement
pursuant to Section 6.9 of the Credit Agreement shall become a
Grantor for all purposes of this Agreement upon execution and
delivery by such Subsidiary of an Assumption Agreement in the
form of Annex 1 hereto.
8.16 Releases. (a) At such time as the Loans, the
Reimbursement Obligations and the other Obligations shall have
been paid in full, the Revolving Credit Commitments have been
terminated and no Letters of Credit shall be outstanding, the
Collateral shall be released from the Liens created hereby, and
this Agreement and all obligations (other than those expressly
stated to survive such termination) of the Administrative Agent
and each Grantor hereunder shall terminate, all without delivery
of any instrument or performance of any act by any party, and all
rights to the Collateral shall revert to the Grantors. At the
request and sole expense of any Grantor following any such
termination, the Administrative Agent shall deliver to such
Grantor any Collateral held by the Administrative Agent
hereunder, and execute and deliver to such Grantor such documents
as such Grantor shall reasonably request to evidence such
termination.
(b) If any of the Collateral shall be sold,
transferred or otherwise disposed of by any Grantor in a
transaction permitted by the Credit Agreement, then the
Administrative Agent, at the request and sole expense of such
Grantor, shall execute and deliver to such Grantor all releases
or other documents reasonably necessary or desirable for the
release of the Liens created hereby on such Collateral. At the
request and sole expense of the Borrower, a Guarantor shall be
released from its obligations hereunder in the event that all the
Capital Stock of such Guarantor shall be sold, transferred or
otherwise disposed of in a transaction permitted by the Credit
Agreement; provided that the Borrower shall have delivered to the
Administrative Agent, at least ten Business Days prior to the
date of the proposed release, a written request for release
identifying the relevant Guarantor and the terms of the sale or
other disposition in reasonable detail, including the price
thereof and any expenses in connection therewith, together with a
certification by the Borrower stating that such transaction is in
compliance with the Credit Agreement and the other Loan
Documents.
IN WITNESS WHEREOF, each of the undersigned has caused
this Guarantee and Collateral Agreement to be duly executed and
delivered as of the date first above written.
PHYSICIAN COMPUTER NETWORK, INC.
By: /s/Xxxx Xxxxxxx
-----------------------------------
Title: Executive Vice President
VERSYSS INCORPORATED
By: /s/Xxxx Xxxxxxx
-----------------------------------
Title: Executive Vice President
XXXXXX-XXXXXX, INC.
By: /s/ Xxxx Xxxxxxx
-----------------------------------
Title: Executive Vice President
INTEGRATED HEALTH SYSTEMS, INC.
By: /s/ Xxxx Xxxxxxx
-----------------------------------
Title: Executive Vice President
PCN HP VENTURE CORP.
By: /s/ Xxxx Xxxxxxx
-----------------------------------
Title: Executive Vice President
PCN SERVICES CORP.
By: /s/ Xxxx Xxxxxxx
-----------------------------------
Title: Executive Vice President
V HOLDING CORP.
By: /s/ Xxxx Xxxxxxx
-----------------------------------
Title: Executive Vice President
TABLE OF CONTENTS
Page
SECTION 1. DEFINED TERMS. . . . . . . . . . . . . . . . . . . 1
1.1 Definitions. . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions. . . . . . . . . . . . 5
SECTION 2. GUARANTEE. . . . . . . . . . . . . . . . . . . . . 5
2.1 Guarantee. . . . . . . . . . . . . . . . . . . . . . 5
2.2 Right of Contribution. . . . . . . . . . . . . . . . 6
2.3 No Subrogation . . . . . . . . . . . . . . . . . . . 6
2.4 Amendments, etc. with respect to the Borrower
Obligations. . . . . . . . . . . . . . . . . . . . . 6
2.5 Guarantee Absolute and Unconditional . . . . . . . . 7
2.6 Reinstatement. . . . . . . . . . . . . . . . . . . . 7
2.7 Payments . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 3. GRANT OF SECURITY INTEREST . . . . . . . . . . . . 8
SECTION 4. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . 8
4.1 Representations in Credit Agreement. . . . . . . . . 9
4.2 Title; No Other Liens. . . . . . . . . . . . . . . . 9
4.3 Perfected First Priority Liens . . . . . . . . . . . 9
4.4 Chief Executive Office . . . . . . . . . . . . . . . 9
4.5 Inventory and Equipment. . . . . . . . . . . . . . . 9
4.6 Farm Products. . . . . . . . . . . . . . . . . . . . 9
4.7 Pledged Securities . . . . . . . . . . . . . . . . . 9
4.8 Receivables. . . . . . . . . . . . . . . . . . . . . 10
4.9 Contracts. . . . . . . . . . . . . . . . . . . . . . 10
4.10 Intellectual Property . . . . . . . . . . . . . . . 11
SECTION 5. COVENANTS. . . . . . . . . . . . . . . . . . . . . 11
5.1 Covenants in Credit Agreement. . . . . . . . . . . . 11
5.2 Delivery of Instruments and Chattel Paper. . . . . . 11
5.3 Maintenance of Insurance . . . . . . . . . . . . . . 12
5.4 Payment of Obligations . . . . . . . . . . . . . . . 12
5.5 Maintenance of Perfected Security Interest;
Further Documentation. . . . . . . . . . . . . . . . 12
5.6 Changes in Locations, Name, etc. . . . . . . . . . . 13
5.7 Notices. . . . . . . . . . . . . . . . . . . . . . . 13
5.8 Pledged Securities . . . . . . . . . . . . . . . . . 13
5.9 Receivables. . . . . . . . . . . . . . . . . . . . . 14
5.10 Contracts . . . . . . . . . . . . . . . . . . . . . 14
5.11 Intellectual Property . . . . . . . . . . . . . . . 15
SECTION 6. REMEDIAL PROVISIONS. . . . . . . . . . . . . . . . 16
6.1 Certain Matters Relating to Receivables. . . . . . . 16
6.2 Communications with Obligors; Grantors Remain
Liable . . . . . . . . . . . . . . . . . . . . . . . 16
6.3 Pledged Stock. . . . . . . . . . . . . . . . . . . . 17
6.4 Proceeds to be Turned Over To Administrative Agent . 18
6.5 Application of Proceeds. . . . . . . . . . . . . . . 18
6.6 Code and Other Remedies. . . . . . . . . . . . . . . 18
6.7 Registration Rights. . . . . . . . . . . . . . . . . 19
6.8 Waiver; Deficiency . . . . . . . . . . . . . . . . . 20
SECTION 7. THE ADMINISTRATIVE AGENT . . . . . . . . . . . . . 20
7.1 Administrative Agent's Appointment as Attorney-in-Fact, etc 20
7.2 Duty of Administrative Agent . . . . . . . . . . . . 22
7.3 Execution of Financing Statements. . . . . . . . . . 22
7.4 Authority of Administrative Agent. . . . . . . . . . 22
SECTION 8. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . 22
8.1 Amendments in Writing. . . . . . . . . . . . . . . . 23
8.2 Notices. . . . . . . . . . . . . . . . . . . . . . . 23
8.3 No Waiver by Course of Conduct; Cumulative
Remedies . . . . . . . . . . . . . . . . . . . . . . 23
8.4 Enforcement Expenses; Indemnification. . . . . . . . 23
8.5 Successors and Assigns . . . . . . . . . . . . . . . 23
8.6 Set-Off. . . . . . . . . . . . . . . . . . . . . . . 24
8.7 Counterparts . . . . . . . . . . . . . . . . . . . . 24
8.8 Severability . . . . . . . . . . . . . . . . . . . . 24
8.9 Section Headings . . . . . . . . . . . . . . . . . . 24
8.10 Integration . . . . . . . . . . . . . . . . . . . . 24
8.11 GOVERNING LAW . . . . . . . . . . . . . . . . . . . 24
8.12 Submission To Jurisdiction; Waivers . . . . . . . . 25
8.13 Acknowledgments . . . . . . . . . . . . . . . . . . 25
8.14 WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . 25
8.15 Additional Grantors . . . . . . . . . . . . . . . . 25
8.16 Releases. . . . . . . . . . . . . . . . . . . . . . 26
=================================================================
GUARANTEE AND COLLATERAL AGREEMENT
made by
PHYSICIAN COMPUTER NETWORK, INC.
and certain of its Subsidiaries
in favor of
Fleet Bank, N.A.,
as Administrative Agent
Dated as of September 10, 1997
=================================================================
